Five days after the Legislature failed to deliver a comprehensive water solution, Gov. Arnold Schwarzenegger remained non-committal about whether or not he will call a special legislative session this fall to deal with the water issue.

At a press conference Tuesday, Schwarzenegger said he was still mulling the idea over.  “I called the leaders, Democratic leaders and Republican leaders, I asked them to go and make every effort possible to sit down again since they came so close. They all said, we came so close but we just ran out of time. That happens sometimes.

 “But let’s go now and think only of one thing that is to get them back to the table and to negotiate and to get it done this week.

Because if they’re that close, they can get it done this week. And then we go and think about the next step.”

For years, lawmakers and governors have sought to put together a plan to overhaul California’s flawed and stressed water delivery system in order to protect the environment and move more water from the rain-rich northern part of the state to Central and Southern California.

Funding remains the major obstacle in the water debate. Republicans, including Schwarzenegger, had called for a general obligation bond for at least part of the package to ensure that all California residents help pick up the estimated $12 billion price tag for the new plan, which could include a huge canal and new reservoirs.

By paying for the plan through a series of fees and local revenue bonds, Democrats say they hope to avoid going before the voters and asking them to borrow billions more at a time when the state’s economy is badly limping.

 Meetings among the major stakeholders in the water debate have continued this week. Sources say they are confident they can resolve some outstanding issues over water rights and the construction of new reservoirs.

Major opposition remains from lawmakers who represent areas that get their water from the Sacramento-San Joaquin River Delta. The water plan will likely include a new proposal to build a new canal to divert water away from the Delta and deliver the water to Southern California.

Water was among the issues lawmakers were dealing with when faced with last week’s legislative deadline. The package of bills passed out of the Assembly Water Committee, but was abandoned before coming up for a vote on the Assembly floor.

In a statement released Friday night, Sen. Darrell Steinberg said, “Everyone agrees that we are close and that we have made a decade’s worth of progress in just a few weeks but there is still some more work to do.  We will continue to negotiate in the coming weeks and we will bring the package up for a vote.”

The package calls for increased water efficiency, calling on urban areas to conserve up to 20 percent more water. The strong conservation language helped the package earn endorsements from some environmental groups.

There was noted progress on  the issue of who controls the Delta – a major sticking point in past water negotiations. By Friday night there seemed to be bipartisan agreement  on a new governing council that would oversee the Delta.

But others in the environmental community – particularly those with an eye on the Delta – have expressed continued opposition to the plan. The Sierra Club and the Planning and Conservation League were also among those still opposed to the plan.

The Legislature broke the water deal into two measures – one to implement the new conservation and Delta management policies.

The other bill dealt with the $12 billion bond that would have gone before voters -- $6 billion in 2010 and another $6 billion in 2014.
Up to $3 billion of that money would be set aside for new “water storage” projects. That is Capitol code for new dams and reservoirs, which have long been the scourge of environmentalists.

But the fact that many environmentalists seem resigned to increasing the state’s water storage capacity is a measure of how far negotiations have come. Many in the Capitol, including Steinberg and Sen. Dave Cogdill, R-Fresno, have been trying to work through a water plan for years.

Steinberg pulled the plug on the water package late Friday night, when Republicans balked at not having the time to read voluminous late amendments to the water bills. Republicans said some of the language in the amendments would have made it more difficult to fund new water storage projects.  

Taken together, the funding package would include $3 billion for dams or other water storage projects. In an important concession to supporters of new dams, the bond would allow agencies to spend that money without legislative approval.

Another $3 billion would be for Delta levees and ecosystem restoration. Other funds would go to grants for regional water projects and land conservancies around the state.